G20, OECD to issue new corporate code

Listed companies in India and other G20 countries will soon have to follow a new corporate governance code that would specify measures for protecting shareholders' rights and keeping chief executive officer salaries reasonable.

Besides, the new code would contain recommendations for financial disclosures by the companies, behaviour of large institutional investors and functionalities of stock markets. The new G20/OECD Principles of Corporate Governance would be released here tomorrow by the OECD Secretary General Angel Gurria and Turkish Deputy Prime Minister Cevdet Yilmaz on the sidelines of the ongoing G20 Minister level meetings.

The G20 Secretariat said sound corporate governance is seen as an essential element for promoting capital market-based financing and unlocking investment.

"The G20/OECD Principles of Corporate Governance provide recommendations to governments on issues including shareholder rights, executive remuneration, financial disclosure, the behaviour of institutional investors and how stock markets should function," it added.

In India, Sebi generally follows all the principles formulated by OECD and G20 to make its regulations robust and in line with the best international practices. The new principles would be applicable to all members of G20 as well as OECD.